Mitsubishi Estate Logistics REIT Investment : Notice Concerning Acquisition of Domestic Real Estate Trust Beneficiary Interests and Lease Contracts with New Tenants

February 7, 2022 Beth McCandry

February 7, 2022

For Immediate Release

Real Estate Investment Trust Securities Issuer

1-6-5 Marunouchi, Chiyoda-ku, Tokyo

Mitsubishi Estate Logistics REIT Investment Corporation

Representative: Ken Takanashi, Executive Director

(Securities Code: 3481)

Asset Management Company

Mitsubishi Jisho Investment Advisors, Inc.

Representative:	Haruhiko Araki, President & CEO
Contact:	Ken Takanashi, Director, General Manager,
	Logistics REIT Management Department

TEL: +81-3-3218-0030

Notice Concerning Acquisition of Domestic Real Estate Trust Beneficiary Interests

and Lease Contracts with New Tenants

Mitsubishi Jisho Investment Advisors, Inc. (the “Asset Management Company”), to which Mitsubishi Estate Logistics REIT Investment Corporation (“MEL”) entrusts the management of its assets, announces today that it has decided to acquire two properties (the “Two New Properties”) in the form of trust beneficiary interests and, subsequently, to enter into lease contracts with new tenants, as described below.

1. Overview of acquisition

			Anticipated	Appraisal	Appraisal
			Value
			Acquisition Price	NOI Yield
Category	Property Name	Location	(Millions of	Brokerage
(Millions of yen)	(%)
			yen)
			(Note 1)	(Note 3)
			(Note 2)

	LOGIPORT Kawasaki Bay	Kawasaki,
	(45% trust beneficiary	36,000	40,365	4.3	N/A
Logistics	Kanagawa
co-ownership interest) (Note 4)
Facilities
Logicross Atsugi II	Atsugi,	9,838	10,500	4.4	N/A

	Kanagawa

(Note 1) “Anticipated Acquisition Price” indicates the purchase price of the respective trust beneficiary interests of the Two New Properties stated in the relevant sale and purchase agreement, rounded down to the nearest million yen and does not include national or local consumption taxes or expenses which will be incurred in connection with the acquisition.

(Note 2) “Appraisal Value” shows the appraisal value stated on each real estate appraisal report with the price as of December 20, 2021. The appraisals of the Two New Properties were conducted by Tanizawa Sogo Appraisal Co., Ltd or Japan Real Estate Institute.

(Note 3) “Appraisal NOI Yield” is the ratio of appraisal NOI using the direct capitalization method to the anticipated acquisition price of each property in each real estate appraisal report, rounded to the first decimal place.

(Note 4) Anticipated acquisition price and appraisal value of LOGIPORT Kawasaki Bay (45% trust beneficiary co-ownership interest) indicate the figures corresponding to MEL’s anticipated acquisition of 45% trust beneficiary co-ownership interest.

(1)	Date of Sale and Purchase Agreements:	February 7, 2022
(2)	Anticipated Acquisition Date:	March 1, 2022
(3)	Seller:	Please refer to the below, “4. Seller Profile”
(4)	Funds for Acquisition:	Proceeds from issuance of investment units (Note 1), the
		borrowings (Note 2) and cash on hand
(5)	Settlement Method:	To be paid in a lump sum on the acquisition date

(Note 1) For details of issuance of investment units, please refer to the press release titled “Notice Concerning Issuance of New Investment Units (Green Equity Offering) and Secondary Offering of Investment Units” announced today.

(Note 2) For details of the borrowings, additional press release will be announced as soon as they are determined.

2. Rationale for Acquisition and Lease Contracts

MEL is sponsored by Mitsubishi Estate Co., Ltd. (“Mitsubishi Estate”) and entrusts the management of its assets to the Asset Management Company. MEL believes that utilizing both Mitsubishi Estate’s competitive advantage as a developer

Note: This press release has been prepared for the purpose of announcing to the public certain matters relating to the acquisition of domestic real estate trust beneficiary interests and lease contracts with new tenants, and has not been prepared for the purpose of soliciting investment. Investors are asked to ensure that they read the prospectus for the issuance of new investment units, as well as any amendments thereto, prepared by MEL before they invest and that they make decisions on investment at their own discretion.

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as well as the Asset Management Company’s competitive advantage as a real estate asset management company (the “Hybrid Model”) characterizes its competitive strength. Making use of such Hybrid Model, MEL aims to realize steady growth of its portfolio and stable management of its assets (including the total (Anticipated) Acquisition Price; the same shall apply throughout this document) by adjusting to fluctuating market conditions and business cycles and maximizing unitholder value.

Acquisition of the Two New Properties is an investment in logistics facilities, which are state-of-the-art and developed by Mitsubishi Estate. Through the acquisition of the Two New Properties, MEL’s asset size will reach 216.2 billion yen, and MEL believes that the acquisition will contribute to the continued steady growth of its portfolio and growth of its unitholder value.

MEL confirmed that all the tenants of the Two New Properties have satisfied MEL’s tenant selection criteria guidelines. For more details on the guidelines, please refer to MEL’s “Report on the Management Structure and System of the Issuer of Real Estate Investment Trust Units and Related Parties (Japanese Only)” dated November 29, 2021.

In deciding the acquisition of the Two New Properties, the points described in “3. Details of the Two New Properties,

The characteristics of the respective Two New Properties” below were evaluated.

3. Details of the Two New Properties

The table below shows a summary of the Two New Properties individually (the “Individual Asset Table”). The terms used in the Individual Asset Table are as follows; when referring to the Individual Asset Table, please refer to the following explanation regarding the terms used therein.

In principle, unless otherwise noted, all information included in the Individual Asset Table is current as of November 30, 2021.

(1) Explanation concerning classification

·“Category” represents the purpose of each the Two New Properties in accordance with the classification prescribed in MEL’s investment policy.

(2) Explanation concerning summary of specified assets

·“Type of specified assets” is the type of real estate and other assets as specified assets.

·“Anticipated acquisition date” indicates the anticipated acquisition date of the Two New Properties stated in the relevant sale and purchase agreement.

·“Anticipated acquisition price” indicates the purchase price of the respective trust beneficiary interests of the Two New Properties stated in the relevant sale and purchase agreement, rounded down to the nearest million yen and does not include national or local consumption taxes or expenses which will be incurred in connection with the acquisition.

·“Overview of trust beneficiary interest” includes the name of the trustee, the entrustment date and the trust maturity date for each of the Two New Properties, as of the acquisition date for each of the Two New Properties.

·“Location” of “Land” is based on the register (one parcel of land, if more than one address was assigned). ·“Land area” of “Land” is the lot area recorded in the register.

·“Zoning” of “Land” indicates the type of zoning as set forth in Article 8-1-1 of the City Planning Act (Act No. 100 of 1968, as amended).

·“Floor-area ratio” of “Land” is the ratio of the total floor area of the building to the Land area, as stipulated in Article 52 of the Building Standards Act (Act No. 201 of 1950, as amended) (the “Building Standards Act”), and indicates the upper limit of the floor area ratio determined by city planning in accordance with zoning and other factors (designated floor-area ratio) (all of the ratios if there is more than one). Designated floor-area ratios may be relaxed or restricted due to the width of roads adjacent to the land or some other reason, and designated floor-area ratios may be different from the actual applied floor-area ratios.

·“Building coverage ratio” of “Land” is the ratio of the building area of buildings to the Land area, as stipulated in Article 53 of the Building Standards Act, and is the upper limit of the building coverage ratio determined by city planning in accordance with the zoning and other factors (designated building coverage ratio). Designated building coverage ratios may be relaxed or restricted due to being a fire-resistant building in a fire control area or some other reason, and designated building coverage ratios may be different from the actual applied building coverage ratios.

·“Ownership form” of “Land” and “Building” indicates the type of rights owned by the trustee.

·“Construction date” of “Building” is the date of construction of the building as shown in the register. If there is more than one main building, the construction date is the oldest date shown in the register.

·“Total floor area” of “Building” is based on the record in the register. “Total floor area” is the total floor area of the main building and annex. If there is more than one main building, the total floor area is the sum of the total floor area for

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each main building.

·“Structure / No. of stories” and “Property type” of “Building” refer to those recorded in the register. If there is more than one main building, the structure / No. of stories and property type are those recorded in the register with respect to the main building that has the largest total floor area.

·“Collateral” outlines a summary description of collateral, if applicable.

·“Appraisal value” shows the appraisal value stated on each real estate appraisal report with the appraisal value as of December 20, 2021.

·“Property management company” is the property management company (“PM Company”), which entered into or is scheduled to enter into a property management agreement (“PM Agreement”), for each of the Two New Properties. ·“Number of tenants” in “Description of tenancy” is the total number of lease agreements indicated in each lease agreement for the building of each Two New Properties as of November 30, 2021. If a master lease agreement has been or is scheduled to be entered into for each of the Two New Properties, the total number of end-tenants will be indicated. However, if one lessee enters into multiple lease agreements for the same building for each of the Two New Properties, the total number of tenants will be calculated on the assumption that such lessee is one party. Lease agreements for shops, vending machines, photovoltaic power generation facilities and parking lots are not included in the calculations of the “Number of tenants”.

·“Name of major tenant” in “Description of tenancy” is the name of the tenant with the largest leased floor area in the relevant lease agreement for the buildings of each of the Two New Properties.

·“Annual rent” in “Description of tenancy” represents the sum of annualized amount of rent which is 12 multiplied by the monthly rent (including common area expenses), rounded down to the nearest million yen, indicated in the relevant lease agreement for the buildings of each of the Two New Properties as of November 30, 2021. However, if there are different provisions for monthly rent (including common area expenses), depending on the term in each lease agreement for the building of each of the Two New Properties, the annualized amount of rent will be calculated based on the monthly rent (including common area expenses) for November 30, 2021 shown in the relevant lease agreement. The rent-free periods and annual rent holiday periods (i.e., rent payments for specific months that are waived) as of November 30, 2021 shall not be included.

·“Tenant leasehold/security deposits” in “Description of tenancy” represent the sum of the outstanding amounts of leasehold/security deposits rounded down to the nearest million yen, indicated in the relevant lease agreement for the buildings of each of the Two New Properties as of November 30, 2021. However, if there are different provisions for the sum of outstanding leasehold/security deposits, depending on the term in each lease agreement for the building of each of the Two New Properties, the amount of tenant leasehold/security deposits for November 30, 2021 shown in the relevant lease agreement is indicated.

·“Total leased area” in “Description of tenancy” is the sum total of leased area shown in the relevant lease agreement for the buildings of each of the Two New Properties as of November 30, 2021, for the building of each of the Two New Properties (the figures corresponding to the trust beneficiary co-ownership interest ratio if any of the Two New Properties will be held in the form of trust beneficiary.) (excluding the lease agreements for shops, vending machines, photovoltaic power generation facilities and parking lots).

·“Total leasable area” in “Description of tenancy” is the total floor area that is deemed to be leasable based on the relevant lease agreement for the buildings of each of the Two New Properties or floor plan, etc. as of November 30, 2021, and does not include the leasable area indicated in the lease agreements concerning shops, vending machines, photovoltaic power generation facilities and parking lots.

·“Occupancy rate” in “Description of tenancy” is the ratio of leased area of each of the Two New Properties to leasable area of each of the Two New Properties, rounded to the first decimal place, as of November 30, 2021.

(3) Special Notes

·“Special notes” are matters that are deemed to be material considering the potential impact on the entitlements, usage, safety, etc. of the Two New Properties as well as the appraisal value, profitability or disposability thereof as of the date hereof.

(4) Explanation of Summary of appraisal report

·“Summary of appraisal report” describes the summary of the appraisal report of each property which was appraised upon request from MEL and the Asset Manager. Such appraisal report only represents the judgment and opinion of the appraiser as of a certain point in time, and the validity and accuracy of its contents, as well as the feasibility of a transaction at the appraisal value, are not guaranteed. The numbers included in the summary of the appraisal report are rounded down to the nearest unit, and the ratios are rounded to the first decimal.

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(5) The characteristics of the respective Two New Properties

The characteristics of the respective Two New Properties are as follows:

1. LOGIPORT Kawasaki Bay

・Easy to access to two major consumption areas as this property is located approx. 27 km (approx. 30 mins) from central Tokyo (Tokyo Station), approx. 21 km (approx. 25 mins) from central Yokohama (Yokohama Station)

・Easy to access major logistics infrastructure in the Tokyo metropolitan area as this property is located within Kawasaki Port, approx. 18 km (approx. 25 mins) from Yokohama Port (Honmoku Wharf), approx. 15 km (approx. 20 mins) from Tokyo Port (Oi Wharf), approx. 11 km (approx. 20 mins) from Haneda Airport

・One of the largest scale multi-tenanted logistics facilities, with direct access from 1st to 5th floors via double ramp-way. Its effective ceiling height of 5.5 m (only the 5th floor has a low floor and effective ceiling height of 5.0- 6.5 m), floor weight capacity of 1.5 t/m2, making it a versatile facility and the floor can be divided into sections with the minimum area size of 730 tsubo, meeting the needs of small to mid-sized floor

Equipped with state-of-the-art features such as a seismic control structure, emergency generators and amenities for workers such as parking spaces accommodating 686 cars in addition to shops and lounges

・Easy to secure workforce as this property is easily accessible from Kawasaki Station by bus, and is equipped with amenities for the workers

・Located approx. 500 m from “Higashi Ogishima IC” on Metropolitan Expressway Bayshore Route ・Located approx. 5.3 km from Sangyo-doro Ave. and approx. 8.3 km from National Route 15

2. Logicross Atsugi II

・Located in an area suitable for logistics facilities in the central Kanagawa prefecture, approx. 64 km (approx. 50 mins) from central Tokyo (Tokyo Station), approx. 47 km (approx. 40 mins) from central Yokohama (Yokohama Station)

・Located approx. 51 km (approx. 45 mins) from Yokohama Port (Honmoku Wharf), approx. 58 km (approx. 55 mins) from Haneda Airport

・This property is 4-storey above ground, has two main entrances and truck berths on both north-west and south-east sides of this property. Equipped with 3 freight elevators and 4 vertical conveyers, which makes it easy to divide up floors

・With a floor weight capacity of 1.5 t/m2, effective ceiling height of 5.5 m and pillar span of 10.0 m × 10.7 m, this property is highly versatile

・Securing workforce through easy bus access to Kanagawa Nairiku Industrial Park by bus, and this property is equipped with parking spaces accommodating 72 cars

・Located approx. 2 km from “Sagamihara Aikawa IC” on the Ken-o Expressway

・Located approx. 600 m from National Route 129 and approx. 9 km from National Route 16

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LOGIPORT Kawasaki Bay (45% trust beneficiary co-ownership interest)

Property name		LOGIPORT Kawasaki Bay

Category		Logistics facilities
Type of specified assets	Real estate	trust beneficiary interests (45% of trust beneficiary co-
ownership interest)

Anticipated acquisition date	March 1, 2022
Anticipated acquisition price	36,000,000,000 yen
Seller		Domestic business company (Note 1)
Overview of	Trustee	Mitsubishi UFJ Trust and Banking Corporation
trust	Entrustment date	December 20, 2019
beneficiary

interest	Trust maturity date	November 30, 2029

	Ownership form	Proprietary ownership
	Location	7-1, Higashi Ogishima, Kawasaki, Kawasaki, Kanagawa
Land	Land area	134,831.45 m2
Zoning	Exclusive industrial districts

	Floor-area ratio	200%
	Building coverage ratio	40%
	Ownership form	Proprietary ownership
	Construction date	May 9, 2019
Building	Total floor area	289,900.59	m2
Structure/No. of stories	Steel-frame reinforced concrete building with alloy-plated steel sheet roof

	/ 5 story building

	Property type	Warehouse, Office
Collateral		Not applicable
Appraisal value		40,365,000,000 yen (as of December 20, 2021)
Real estate appraiser	Japan Real Estate Institute
Probable maximum loss (PML)	3.6 % (obtained from the earthquake risk assessment report prepared by
Tokio Marine dR Co., Ltd.)

Property management company	XYMAX Corporation
	Number of tenants	14
	Name of major tenant	Not disclosed (Note 2)
	Annual rent	1,728 million yen (Note 3)
Description of	Tenant leasehold/security	398 million yen (Note 3)
tenancy	deposits

Total leased area	117,762.91	m2 (Note 3)

	Total leasable area	117,762.91	m2 (Note 3)
	Occupancy rate	100.0 %

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Real Estate News 24

Mitsubishi Estate Logistics REIT Investment : Notice Concerning Acquisition of Domestic Real Estate Trust Beneficiary Interests and Lease Contracts with New Tenants